Thursday, October 19, 2017

Friday Watch

Evening Headlines
  • U.S. Senate Adopts Budget, Giving Momentum to Trump's Tax-Cut Plans. The Senate adopted a fiscal 2018 budget resolution Thursday that House GOP leaders agreed to accept, a show of unity aimed at speeding consideration of President Donald Trump’s plan to enact tax cuts. Final approval of the budget, which cleared the Senate 51-49, will unlock a special procedure allowing Republicans to pass a subsequent tax code rewrite without Democratic support. The House and Senate tax-writing committees plan to release draft legislation by early November, which will set off a furious lobbying battle as Republicans attempt to enact a bill by the end of the year.
  • Asia Stocks to End the Week Lower; Kiwi Holds Loss. Stocks in Asia opened lower on the final day of a week that’s seen record levels for global equities as investors assess the prospects for earnings, the economy and monetary policy implications of a new chair of the Federal Reserve. Japan’s stocks declined after a rally in the yen weighed on exporters and yet another corporate scandal. Nissan Motor Co. shares dropped after the carmaker halted domestic production because of quality-control issues. The dollar remained under pressure after a report from Politico that President Donald Trump is leaning toward Jerome Powell as the next Fed chairman. In New Zealand, the election result pummeled the kiwi dollar as investors said the outlook for economic growth had deteriorated. Japan’s Topix index lost 0.3 percent as of 9:20 a.m. in Toyko with an index that includes automakers dragging down the benchmark. Nissan shares fell as much as 1.6 percent. Australia’s S&P/ASX 200 Index fell 0.1 percent and South Korea’s Kospi index rose 0.2 percent. New Zealand’s S&P/NZX 50 Index remained weaker though it pared a loss of as much as 1.2 percent. Hang Seng Index futures were up 0.2 percent in most recent trading. That market fell 1.9 percent on Thursday, with moves exacerbated by derivatives contracts.
Wall Street Journal:
  • Beneath the Market Rally: A Lot Less Trading. Low volatility, rise of passive funds and lack of market-moving news have kept many investors on sidelines.
Zero Hedge:
Night Trading 
  • Asian equity indices are -.25% to +.75% on average.
  • Asia Ex-Japan Investment Grade CDS Index 75.25 -1.0 basis point. 
  • Asia Pacific Sovereign CDS Index 15.75 -.5 basis point.
  • Bloomberg Emerging Markets Currency Index 73.73 -.14%.
  • S&P 500 futures +.42%.
  • NASDAQ 100 futures +.5%.
Morning Preview Links

Earnings of Note

  • (BHGE)/.12
  • (CLF)/.33
  • (GE)/.49
  • (GNTX)/.31
  • (HON)/1.74
  • (KSU)/1.31
  • (MAN)/1.97
  • (MINI)/.32
  • (PG)/1.07
  • (SLB)/.42
  • (STI)/1.05
Economic Releases 
10:00 am EST
  • Existing Home Sales for September are estimated to fall to 5.3M versus 5.35M in August.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Yellen speaking, Fed's Mester speaking, German PPI report and the (SCHW) business update could also impact trading today.
BOTTOM LINE:  Asian indices are mostly higher, boosted by industrial and technology shares in the region. I expect US stocks to open modestly higher and to maintain gains into the afternoon.  The Portfolio is 100% net long heading into the day.

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